Accessrx Blog

Accessrx Blog


Telemedicine Growth Sees Similarities with Past Progress

December 04, 2014

Managed care, corporatization of healthcare, and telemedicine have all changed or are changing healthcare.


The healthcare system in the United States is radically different from how it used to be.

Changes have been driven by economic conditions, consumer demands, changes to physician payment models, and the broad sweep of technology. One of the biggest changes seen in the healthcare landscape in the 20th century has been the shift from indemnity plans that were primarily based on patient wants to managed care systems that aim to control rapidly increasing costs. And the changes continue apace.


Healthcare in 2014 is delivered very differently than it was 50 or even 20 years ago. These changes affect every American directly or indirectly. Questions about how healthcare is delivered will only become more amplified as the American population continues to age, and as healthcare costs continue to increase. Healthcare delivery is an evolving reality, and understanding previous and ongoing changes is critical for healthcare providers, lawmakers, and everyday consumers.


How It Used to Be


During the majority of the 20th century, healthcare delivery in the US had a few defining features that affected most people:



  • Consumers relied on physicians who acted with considerable autonomy
  • Care was generally received from independent, not-for-profit hospitals
  • Insurers reimbursed healthcare providers on a fee-for-service basis and did not intervene in medical decision-making

While these characteristics were beneficial to consumers with health insurance, it is not hard to see how the model led to healthcare costs that spiraled rapidly upward. The concept of managed care, wherein the organizations that reimburse healthcare providers take an active role in managing patient care, took hold late in the 20th century, and is still at the heart of most healthcare delivery today.


A Decade-By-Decade Timeline of Care in the US


During the 1950s, the cost of hospital care doubled, but major national concerns focused more on things like the Korean War. A proposal for a national health plan by President Harry Truman had been denounced by the American Medical Association in the 1940s, and national sentiment in the 50s didn’t favor revisiting the issue. Further decades included the following changes:



  • 1960s: As those outside the workforce, including retired people, had increasing difficulty affording insurance, President Lyndon Johnson signed Medicare and Medicaid into law.
  • 1970s: President Richard Nixon officially named pre-paid group health plans as health maintenance organizations (HMOs) and signed legislation providing federal endorsement and certification.
  • 1980s: Healthcare became more privatized and corporatized. Under President Ronald Reagan, and Medicare and private insurers shifted to payment by diagnosis rather than treatment.
  • 1990s: Healthcare costs rose at double the inflation rate. By the end of the 1990s, 44 million Americans (16% of the population) were without health insurance.
  • 2000s: More people expressed concerns that employer-based health insurance couldn’t last. Direct-to-consumer advertising of pharmaceuticals and medical devices accelerated.
  • 2010s: The Affordable Care Act was signed into law by President Barack Obama. Technology has advanced to where telemedicine is becoming more practical for healthcare delivery.

Managed Care


Managed care reaches most areas of healthcare delivery today. Ideas behind managed care are optimizing health through preventive care, reducing overutilization of services, and standardizing quality of care offered by fee-for-service providers. Under managed care, insurers don’t just write checks, but are involved in decisions about how much and what kind of care patients receive, and which providers provide it. Managed care advanced most in the 1990s, as by 1997, only 18% of insurance plans were traditional indemnity type plans.


How Telemedicine Fits In


Once policy catches up with technology, expect telemedicine to become routine.


Currently it appears there is no going back to the indemnity model of healthcare insurance, and that managed care in some form or another is here to stay. The advances in telemedicine technology, however, could help managed care operate far more efficiently than it has in the past.


Many experts believe that adoption of telemedicine is close to reaching a tipping point. Technology is not what’s holding telemedicine adoption back. Rather, adapting the US’s state-based system of physician licensing to the reality of medical services provided over long distances, as well as developing reimbursement models under both public and private insurance programs are slowing expansion of telemedicine.


Private insurers are starting to offer telemedicine services through employer-based plans, and these services are being enthusiastically embraced by consumers due to their convenience and cost savings. Medicaid, which is administered by the states has been quicker to include telemedicine services than Medicare, which is administered federally, but both are exploring options on expanding reimbursement to physicians for telemedicine services.


What to Expect in Coming Years


Managed care has to adapt if healthcare costs are to be contained, and telemedicine is considered a major cost containment initiative by an increasing number of legislators (on the state and federal level), healthcare providers, insurers, and consumers. As rules for Medicare reimbursement of telemedicine services are loosened, as laws concerning provision of telemedicine services across state lines are enacted, and as more insurers offer telemedicine options and reimbursement for telemedicine services, expect telemedicine to have a major effect on managed care.


Conclusion


There is no going back to the post-war “Marcus Welby†model of medicine. Providing medical services to a diverse population of 300 million is remarkably complex and requires innovation on the part of healthcare providers, insurers, consumers, and developers of technology. Just as managed care revolutionized how healthcare was delivered starting in the late 20th century, expect telemedicine to have significant impact on how healthcare is delivered.


The result is expected to be excellent patient outcomes, better use of resources, and appreciable savings of money and time. The technology exists and is used every day outside of medical settings. Once legislation and policy catch up with technology, telemedicine is expected to make a measurable, positive difference in healthcare delivery.


AccessRx.com is watching the changes wrought by telemedicine with great interest. Having worked with US-licensed pharmacists to deliver prescription medications to over half a million customers over 15-plus years, AccessRx.com knows firsthand how telemedicine can make people’s lives more convenient. We have a long track record of outstanding customer service, competitive pricing, protection of customer privacy, and superlative online security practices, and we invite you to explore our site and learn more about our services.